Tuesday, March 25, 2014

On March 21, 2014, Judge Emmet G. Sullivan of the U.S. District Court for the District of Columbia upheld new Department of Labor, Office of Federal Contract Compliance Programs (OFCCP) regulations implementing Section 503 of the Rehabilitation Act that establish a seven percent utilization goal and data collection requirements on the hiring and employment of individuals with disabilities for federal contractors. The rule went into effect March 24, 2013. Associated Builders & Contractors, Inc. (ABC) challenged the rule asserting that the seven percent utilization goal and data collection requirements were arbitrary and capricious.

In upholding the rule, Judge Sullivan stated that OFCCP's interpretation of Section 503 was permissible and not an abuse of the agency's authority. Judge Sullivan accepted the agency's reasonsing for establishing the seven percent utilization goal and data collection and analysis requirements stating clearly that the rule is not arbitrary and capricious. Judge Sullivan rejected ABC's argument that the rule violated the Regulatory Flexibility Act.

ABC released the following statement in response to the courts decision: "We are disappointed in the decision and we will contemplate our options in further challenging this rule.ABC and its members support nondiscriminatory practices toward individuals with disabilities on federal projects, and we will remain committed to placing these individuals in good jobs and careers in the construction industry; however, OFCCP’s rule imposes wasteful and unnecessary data collection and reporting requirements on government contractors without any supporting evidence from the agency that contractors weren’t previously meeting the requirements. It is particularly onerous for small businesses that historically have provided services but lack the resources to comply with the burdensome and unnecessary requirements."

Please stay tuned for more coverage on the matter from Notice and Comment!